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A comparison between

Motorcycle and Scooter segments

Reference frames, Present, Future

Leo Francesco MercantiExecutive Vice President

Product Development & RacingPiaggio & C. S.p.A.

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The Piaggio Group, based in Pontedera (Pisa, Italy), is one of the world’s top manufacturers of two-wheel motor vehicles� Controlled by Immsi S.p.A.� Headed by Roberto Colaninno, Piaggio Group CEO � Listed on the Milan Stock Exchange since 11 July 2006� Ranks as one of the world’s top four players in its core business, with a

consolidated leadership position on European PTW market:

- 5 R&D centres- More than 7,000 employees.

� The product range includes scooters, motorcycles and mopeds from50cc up to 1200cc

� Seven are the Brands : Piaggio, Vespa, Gilera, Aprilia, Moto Guzzi, Derbi and Scarabeo brands

� The Group also manufactures 3/4 light transport vehicles for the Ape, Porter and Quargo ranges

The Piaggio Group

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Pontedera (Pisa): three plants– PTW for the Piaggio, Vespa and Gilera brands– Light transport vehicles (LTVs) for the European market– Engines for Group scooters and Aprilia motorcycles

Scorzè (Venice): Aprilia and Scarabeo brands PTWs

Mandello del Lario (Lecco): Moto Guzzi vehicles and engines

Barcelona (Spain): Derbi brand PTWs

Baramati (India): 3-4w LTVs for the local market

Vinh Phuc (Vietnam): Vespa for local market and ASEAN area

Piaggio Group holds a joint venture in China (Foshan) owned 45% by Piaggio, and therefore not included in the Group’s consolidated results.

Prodution plants

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Business results (2008)

Piaggio Group shipped 648,600 vehicles worldwide:

– 470,500 PTW business

– 178,100 LTV business.

– Consolidated net sales: € 1.570,1 million

– Consolidated EBITDA: € 189,1 million

– Operating profit: € 94,5 million

– Pre-tax profit: € 59,6 million

– Net profit: € 43,3 million

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Motorcycle and scooter, the

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Two of a different kind

Scooter– rationality– urban mobility needs– traffic challenge

Motorcycle– passion– emotion– self fulfillment

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Contiguous different worldsNo insuperable barriers separate the worlds.

Scooters can dream and Motorcycles can be useful in the cities:

both help saving time and gasoline, reducing pollutionboth avoid traffic jam, parking issues

but certainly they remain two different worlds

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Different effects of the economical crisisScooter as a concrete answer tomobility needs:

– is less crisis-sensitive– shows quick reaction to economical

incentives– rewards “value for money”:

• cheap/runabout models

• essential models

Motorcycle as an expression ofpersonality:

– is more crisis-sensitive, but showspositive interest towards:

• motorsports

• intangible assets (style)

• prestige and distinctiveness of Brands

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Different effects of the economical crisis

The economical crisis casts its effects on both Markets.An indepth analysis shows distinguished reactions betweenScooters and Motorcycles

% respect previous year result

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Rational and incentivable

Scooter Mkt trend is balanced by Italian Mkt whichdemonstrates huge effects of Gov. incentives in fighting the crisis.

Economical factors are basic in rational choices.

% respect previous year result

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Tangible “intangibles” effects

As Motorcycle Eu Mkt suffers relevantely the crisis, Western traditional Brands are quite constant and increase their % on total:

“Intangibles” are relevant factors for motorcycles.

% of EU Mkt.

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Different Critical Success Factors

Scooters:– Reliability– Functionality– Safety and Comfort– Value for Money

Motorcycles:– Design & Innovation– Technical level– Accessibility– Brand Identity & Reference

world (sport, community)

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Scooters:– Higher production volumes– High Standardization– High Engines carry over– Functional and smart rather than

sophisticated technical solution– Challenging price competition

Motorcycles:– Lower production volumes– Engines and frames dedicated to

a single model or Brand– Need of refined technical solution– Challenging technical competition

Different Technical Frames

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Different Suppliers Frames

High fragmentation ofMotorcycle Mkt requests a high number of models, quickreaction to Mkt changes, short Supplier chain due to high technical competition

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Over the crisis: new words for new world

Incoming social and personal behaviours, such as…

…leads to the birth of a new customer withnew values and greater awareness

Consciousness and self consciousnessabout Nature’s worth, resources limitedness, Carbonprint relevance.

Awareness about the role and dignity ofevery human being on the Planet

Socializing, groupingto be worth more and to be a part of virtualor real communities.

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New words for new customers

Scooters will be even more:– functional, safe, practical– car alternative, real urban solution– eco sustainable– beneficial in terms of social costs

The process must be pushed and sustained by:– Governments– Manufacturers– Associations

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New words for new customers

Motorcycles will be even more emotionalbut in quite a new way:

– less aggressive/machomachine– more socializing and aggregating– ecofriendly– intangible assets leader

Initiatives aimed to promote this newtrends should be held by:

– Main Manufacturers– National and International Federations– Sport Associations– Governments

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Conclusions

Both Scooter and Motorcycle segments have the possibilityto overcome the crisis :

– Scooters can be more and more one of the best solution forpersonal urban mobility, adding to their traditional advantages the flexibility towards new Engines technologies for Low or Zero Emission (such as Hybrids and Electrics).

– Motorcycles will remain one of most popular answer to human needof freedom and self fulfillment, expecially if they will be able toconjugate their own values to new customer languages and references.

….. But Institutions should sustain the marketsand cooperate with Manufacturersto catch the incoming opportunities

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Thank you for your attention

©Piaggio & C. S.p.A.

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